Why UP Government Backtracked on ₹25,000 Crore AI MoU with Startup Puch AI

The Uttar Pradesh government's high-profile pledge to spend 25,000 crore on AI quickly became a story of promises or what actually follows, after admitting the deal with puch AI was just a sketchy MoU - not a firm commitment.

Chief Minister Yogi Adityanath painted a bold picture: AI parks, data centers, an AI university, and even an "AI city" near Lucknow. The scale of it inspired interest, Mainly as UP positioned itself as a rising player in india's AI space.

It seems hard to ignore that within 24 hours, officials stepped back and said the MoU wasn't binding at all - just a starting point meant to be studied closely before anything real happens. The state emphasised that any project would proceed only after evaluating the investor’s financial and technical capabilities.

The backtracking was triggered largely by credibility concerns around Puch AI. Industry watchers and social media users asked if a young startup - just 12 employees, under 10 crore in revenue, no public AI products, could actually deliver such a big project. The company's valuation at 250 crore and absence of major releases only deepened doubts.

The government's pattern of signing large MoUs to show progress often clashes with what real startups can do. Digital groups now monitor these deals instantly, comparing promises to actual progress. Is it just optics?

Puch AI said the MoU was a shared push with no state cash outlay. They rejected the revenue claims as misread data, arguing that their model is about open access, not building apps for scale.